Startups petition Congress on patent reform

SAN JOSE, Calif.  A group of 100 startup companies sent a letter petitioning the U.S. Congress to support the current one-year grace period for filing a patent application. Moves toward patent reform threaten to eliminate the grace period, said the group.

Startups, universities and independent inventors think the lack of this grace period will make it more challenging for them to share information with other researchers or people from whom they need to gain funding," said Tim Tardibono, policy director for Connect, a non-profit agency representing the group.

Backers of patent reform struck a compromise in February and hope to bring draft legislation up for a vote in the Senate before the Memorial Day recess. But it's not clear they will succeed, said Tardibono who recently opened a Washington D.C. office for Connect.

"The bill has been around awhile and addressed a lot of major issues, but there's still more work to be done," he said.

The issue of the grace period "has been overshadowed by the debate on other provisions, but is no less disruptive to the technology investments fostered by the patent system," the group said in its letter. "Small businesses and startups are significantly more exposed than large firms because they must rely on far greater and earlier disclosure to outside parties," it added.

The letter was signed by about 100 California startups ranging from ActiveVideo Networks Inc. (San Jose) to ZuumCraft Inc. (San Diego).

Proponents of the draft patent reform bill say the U.S. needs to harmonize its patent system with those of the rest of the world based on a first-to-file system. The reform draft still allows for a grace period if prospective applicants make a disclosure of their technology, but such disclosures risk letting others file their own patents, according to the startups' letter.

Separately, the Connect group is also pushing for Congress to let the patent office keep all the fees it generates to help address its growing backlog of applications. "Currently the draft bill allows the patent office to set its own fees, but the problem is there's nothing in the bill that lets them keep all those fees," said Tardibono.

The patent office will generate an estimated $220 million in fees beyond what it is allowed to keep under current appropriations bills. The extra funds "are critical to startups because there's an application backlog of three to six years at the patent office and that could be killer for small companies," he said.